What you're about to read is a capsule history of the first hot alternative-cryptocurrency presale coin of 2016. Its take was smaller than Lisk's or WAVES', but it garnered a lot of Bitcoin for its time. It's also the one, thanks in part to the altcoin bear market turning into a bull market, which notched up more than a 25X gain for its fortunate pre-buyers if they sold at the right time. Its fate, both in its high times and its more recent times, shows the wrinkles facing any grassroots tech project in Altcoin Land.

New Beginnings And Old Repute

On October 21st, 2015, yet another day in the final episodes of a now-gone bear market, the regulars haunting the Announcements board of Bitcointalk saw a new pre-announcement for a then-vapourware cryptocurrency called IoTA. It's intended to be an Internet-of-Things cryptocurrency with a lightweight blockchain and no transactions fees, so as to facilitate micropayments. Intended primarily for machine-to-machine transactions, its aim is to bring monetization to the Internet of Things. In a later article published by CoinTelegraph, the co-founder illustrated this possibility by giving these use cases: micro-payments for information on electricity consumption, heat consumption, spot weather data, etc., so as to incentivize folks to provide huge sets of very granular data for better Big Data analytics. He also mentioned more homely use-cases, like a smart fridge ordering a new bag of milk or a smart toothbrush ordering a new tube of toothpaste.

The original post of the IoTA pre-announcement was made by a fellow who goes by the nick Come-from-Beyond. In the teeth of the gloomy days of late 2015, his proposal got a lot of attention because Come-from-Beyond was the #1 heavyweight in the Nxt community in its earlier days. He had already backed away a little from the Nxt world to pursue Jinn: its goal is to build a massively-parallel microchip using balanced ternary logic in which the three possible values are (-1, 0, 1) The "trit" framework is actually quite old, but it was left by the wayside when binary logic became standard. Come-from-Beyond became interested when he found out that balanced-ternary logic has advantages over standard binary: namely, more compact representation and less difficulty in constructing a massively parallel processor. As indicated above, it's the latter advantage that got him interested in balanced ternary.

He did sell Jinn tokens with a partner on the Nxt Asset Exchange, and they did well even though a new hardware innovation was a high bar. It seemed to be humming along, but it got bogged down by delays; Come-from-Beyond's partner Triangle got defensive when flak developed. Less than a month before IoTA was announced, someone on the Jinn thread noted that Come-from-Beyond was working on a whitepaper that would prove to be for IoTA. Triangle dealt with some flak by getting his dander up: "Every single time an update has been made and the delays have been explained. You can be as impatient as you like, that is 100% your right, but do not accuse us of lying. Plans change in start-ups all the time, especially something that is primarily experimental hardware. This is why we quit giving out dates, people read too much into it and think it means something special when it gets delayed a week or two. Welcome to the hardware world, often delays last months and years."

He ended his rebuttal with these words, which would prove to be a foreshadow: "You already got a 5x ROI, so make your choice, it's only yours to make. We will continue doing what is needed for Jinn to succeed in the real world long term, not for the tokens to 5x or 10x or 15x in the short-term." As he got more pushback on the Jinn official thread, his defensiveness became a continual stance – particularly with regard to the delays. Eventually, the thread dribbled away as attention shifted to IoTA; the Jinn project remained in "stealth mode." His second-last message on the subject was upbeat:

There is constant progress, but like I said earlier this month we will postpone any announcements until after IOTA is launched. After that a big summary will come and we will exit stealth mode.

IOTA spawned as a necessity for our vision of the Jinn project, so it only makes sense to first introduce IOTA and then Jinn afterwards. For anyone still wondering why it's "taking so long": it's really not. We're trying to redo computing itself here, it's not an easy task. Even big companies spend years developing their new iterations, Jinn is no iteration, it's a brand new paradigm, so patience is important.

Also we *have* to be very secretive about the inner workings and standings of the Jinn project simply due to the fact that once we launch out of stealth and we demonstrate what we have invented and created we are going to get noticed by people who got tens of billions at their disposal, we're already enough in a 'David vs Goliath' situation, let's not give Goliath more advantages:)

….From a personal perspective I feel that the Jinn project has shown that you can indeed crowdsource resources in a decentralized fashion, but also shown that there are indeed 'side effects'. I used to be a huge champion of crowdfunding and crowdequity, but over the last 1.5 year I have come to dislike it more and more on a general level, as you end up with A LOT of inexperienced people who does not understand what they purchased, as well as pure speculators that does not care one second for the project itself and will act accordingly, which consumes A LOT of time and energy for the people holding the crowdfund, time and energy MUCH better spent on the project itself.

The Jinn project is about reinventing computing, not asset trading, thus having further liquidity of JINN tokens is not something we're focused on. In fact at the moment it's something we oppose due to necessary steps in the future to identify JINN token holders and enforce the profit-rights they hold.

I will do a blogpost on this entire experience some time in the future to inform other people who are contemplating going the route we did with JINN. I know from other projects that a lot of the concerns I have with this kind of thing is shared by others who has gone through and conducted the same 'experiment'

Of note is the fact that Triangle took all the flak. Come-From-Beyond's reputation suffered no blemish.

His golden reputation, not just in the Nxt world but also in the Bitcointalk world, did a lot to get a lot of interest in IoTA before its crowdsale. So did the promised new technology. The associated whitepaper, here in a PDF file, quickly generated a lot of discussion and some critiques. Of course, this being the cryptocurrency frontier, a troll or two showed up. Thus, Come-from-Beyond – who had set up a moderated thread – stated that he'd "heavily use my moderation privilege against trolling, insults and offtopic." But he did not moderate skeptical posts about the promised technology. As a result, he soon got a lot of posts from technical-oriented folks who soon dominated the thread. Many of them were interested in IoTA's "secret sauce" that would enable it to be a proper cryptocurrency without using a standard blockchain.

This "secret sauce" is a Directed Acyclic Graph (DAG) or "tangle." A DAG is a set of nodes and paths such that the paths are one-way (there's a start and finish) and there's no path from a node to itself except the "trivial path" (zero-length path). This Tangle is not a blockchain, although it can act like a blockchain when the "load" (number of unconfirmed transactions) is low. One major difference consists in how the Proof-of-Work is distributed. Each node must approve two prior transactions when it makes a new transaction: this proof-of-work sets up the paths. In this way, the tangle grows through time and older transactions gain more and more legitimacy (weight) over time. This process of growing the tangle, which assigns older transactions greater cumulative weight, takes the place of blockchain confirmations. As pointed out in IoTA's whitepaper, the use of a DAG for a cryptocurrency is not a new idea. This point allayed always-sensible fears about using new and unproven cryptography for a new cryptocurrency.

For verification purposes, the direction of the Tangle points back in time to the genesis block. Every unverified transaction forms a "tip" in the graph, or a node which has only paths from it; there are no path leading to it until or unless it's verified by a new transactional node. Once these "tips" are verified, which is entailed by one or more new transactions forming new tip(s) built on top of the current tip, then they're a regular part of the graph. Their cumulative weight grows along with the Tangle. As noted above, a node making a new transaction requires some Proof-of-Work: it has to select two earlier transactions to (re)verify. These can be unverified transactions – tips - but they don't have to be. In answer to some vetting in the thread, Come-from-Beyond said that the default programming for nodes would select tips whose prior txs have the greatest cumulative weight. This feature makes it a lot harder for a malicious node to construct a private Tangle with a double-spend and induce the other nodes to treat its bad-Tangle as the new legitimate one. Since all cryptocurrencies are networking software at heart, there's always a chance of the nodes coalescing around a new ledger. Typically, these "re-orgs" are innocuous.

As explained in that above-mentioned interview, IoTA is primarily designed for machine-to-machine transactions. In Come-from-Beyond's original announcement post, the benefits listed by implication were: less centralization; quantum-resistant cryptography; micropayments; robustness (ease of self-healing) in the face of a network partitioning; integrating transactors with transaction verifiers; no hard cap on transactions per second; minimal hardware requirements; ease of adding Tangle pruning that prevents blockchain bloat. These features were put in a framework-list of conventional cryptocurrency's limitations.

Also mentioned was the feasibility of hooking up a tangle to another cryptocurrency's blockchain, thus making it act as a checkpoint enforcer, a sidechain or a trusted oracle that supplies data to a blockchain or smart contract residing in a blockchain.

Later, he discussed one wrinkle of this new design: there has to be a continual flow of transactions for the network to be secured or else checkpoints or overlaid PoW had to be added. This wrinkle, he explained as going hand-in-hand with IoTA being used by machines micro-transacting with each other. To get the network off the ground, he planned for checkpoints every five minutes.

In addition to his prior reputation, he showed a gift for community-building. Shortly after unveiling the hashing function to be used for IoTA, he invited everyone to help out by asking all and sundry to click a link to a hashrate-measurer for this algorithm and report the rate plus the device used. Within two days, he got more than two pages' worth of responses. He then led them to download an address generator and instructed them on what kind of seed was necessary to generate a new IoTA address. To assure that each person would get the IoTA he was owed in exchange for the Bitcoin he sent, Come-from-Beyond explained that each pre-buyer had to send the Bitcoin in a custom transaction which had to include a signed message with 132 characters derived from the seed.

As a means of building community support for the then-upcoming pre-sale, it was shrewd. Encouraging folks to take a hands-on role about two weeks before the pre-sale had even begun not only generated interest in the pre-sale itself but also got them interested in helping test the various iterations of IoTA during the testnet phase. The actual crowdsale began on November 25th and was announced on the main thread three days in advance.

That announcement was made by Come-from-Beyond's partner in the venture, a fellow who took the Bitcointalk nick iotatoken. He identified his role as "<a href="">management and marketing." As the presale announcement drew near he was upbeat and largely cheerful when rebutting skeptics.

Except on one point, which appeared in the thread on October 28th and 29th. He was responding to a veteran poster who fretted that the pre-sale of IoTA constituted the sale of unregistered securities as according to the Howey test, which specifies four criteria to determine if a different vehicle is a thinly-disguised security. Now, it is true that pre-sales were typically called "IPOs" back in 2013 and 2014, but the use of the term was essentially metaphorical. When looked at from one angle, a "cryptocurrency IPO" bears as little relationship to an initial public offering as does an "iron horse" to a Clydesdale. But the proliferation of alternative-cryptocurrency exchanges and the inevitable speculation did make the question ambiguous when the Howey test was factored in.

I have no problem with people being skeptical of ICOs and we're not selling securities so it's not in our place to give anyone advice on whether or not they want to buy IOTA tokens. It's essentially a software sale, the iotas being the software, either you want some or you don't. If you don't, that is 100% fine by us. If you do want some, you are free to purchase them. It's really that simple and so we are immune to this kind of criticism because we are completely open and honest here. We are not selling anyone a dream or promising an investment that we guarantee will grow 10x. All of this will be settled by the market which we have no control over.

What we do promise is that we will launch IOTA which has been in development for quite some time already and all the technical aspects are available for people to review and we are here to answer those questions. Anyone that does not find this fair should just exit the discussion.

In context, it contained the same old self-confidence in IoTA and its prospects. But, like those above-quoted responses of Triangle, this response would prove to an adumbration….

Excitement, Bubble, Toil…

The crowdsale began on November 25, 2015, five weeks after the original pre-announcement. Given that the altcoin market was at the end of being ravaged by a powerful bear, it was inevitable that the first response was derisory and was followed by several other disparagers in the first few pages. But the preparation shown in the pre-announcement phase did pay off: iotatoken and Come-from-Beyond managed to prevail despite a tough crowd.

The two did go out of their way to be above-board. Both made it repeatedly clear that they would not receive a single IoTA; they would only receive the proceeds from the pre-sale. In altcoin jargon, they would receive no "pre-mine" of IoTAs. They also conducted the crowdsale in the rubric of a registered Norwegian company. The company was named Triangle, which established that iotatoken and the above-quoted Triangle of the Jinn project was one and the same person. Also, instead of a first-day pre-buyer bonus, their highest early-bird bonus percentage prevailed for a full nine days.

As a favour to the Jinn token holders, the duo said that Jinn tokens could be swapped for IoTAs at a valuation of 0.0063 BTC per token. There was a condition, though: a Jinn holder had to send his entire balance of Jinn to be eligible for the swap. This condition was intended to make the swap act as a kind of buy-out for folks who were impatient about the progress of Jinn.

Also, they changed their original signed-message plan to a simpler one: each sender would be asked to send a custom-generated very tiny amount of Bitcoin to the presale address in order to verify that he was in fact the guy who was entitled to receive the IoTA. This care, plus the already drummed-up interest, meant that IoTA had a vibrant and supportive community as of the crowdsale's go-time. Come-from-Beyond and iotatoken were far from the only ones to tell the deriders that they were aught but trolls.

This support, plus quick answers to non-trollish questions, meant that the crowdsale did drum up a lot of funds. So did the promise of IoTA, particularly the promise of quantum-resistant cryptography. As the pre-sale neared the end, Come-from-Beyond relaxed the address-generation policy so that it no longer required 81 characters and unveiled the new generator with a friendly contest to find the seed that generated the longest English word in the generated IoTA address. Just before that unveiling, and after a few hints that showed he was already working on the software, he promised "We will create the UI". This promise would prove to be prefatory.

Right after the presale ended, iotatoken invited everyone to join a dedicated Ryver channel to discuss IoTA. Come-from-Beyond revealed that he was rewriting the code so as to make it harder to clone: stripping out the default algorithm that chose the tips to confirm and replacing it with a special co-ordinator node; this node would also help secure IoTA in its early days. Given this change, he modified his original promise to have "something in the wild" " by Christmas [2015]". But the good feeling was so pervasive, everyone understood. The total proceeds from the crowdsale were 930.96250857 BTC and 41297 Jinn. As of back then, the BTC take was a big amount. 999,999,999.999999999 IOTAs were to be split between the intrepid pre-buyers.

While the pre-sale was still running, iotatoken presented evidence that a big-league outsider was interested in IoTA. Wanxiang Blockchain Labs Sponsorship Program, an incentivizer of open-source crypto solutions, awarded IoTA a grant of $4,000 from its Blockgrant #1 Genesis round of prizes. The four grand was contingent upon the team launching both the beta and the full version of the cryptocurrency plus forming a foundation for it. Two days after that announcement, iotatoken token posted: "I already got several big names lined up for calls to explain IOTA and how it can impact their business."

These announcements, plus the overall good feeling, resulted in IoTAs moving upwards in price and volume after the presale closed. The first announced after-presale OTC offer was a Nxt Asset on its Monetary System called 1000IOTAs. It was unveiled on December 30th, or a week after the crowdsale had closed. Like the name says, it offered a thousand IoTAs per Nxt token bought. Its offering price was somewhere between three and four times the presale price. At that price, it sold out. Around that time, the pre-sale buyers started claiming their prizes. Early in the New Year, iotatoken urged folks to join the Ryver chat and mentioned that it now contained several rooms for different focuses on how to use IoTA. It was the first time in the thread that he alluded to avoiding the bystander effect. This urging reinforced an earlier exhortation:

We'll be able to give date soon [for the launch], right now everyone that bought IOTA, the software, needs to start thinking about what they are going to do with that software. This is the most important part right now and is what we've setup a Ryver for. There are some interesting brainstorming going on and some interesting projects that are adopting it, but I am still getting way too many PMs regarding when it's going to be added to exchanges etc. A lot of these inquiries are from people who want to acquire IOTAs, but also quite a few who is clearly speculating. We're going to deliver the software, but if you're not going to use it, it wont be of any value. Remember this and start thinking about use cases.

The above statement, particularly the subtle distancing from "speculators," would be another one that foreshadowed. But on that happy January 4th of 2016, it was cheered and taken as further confirmation that IoTA was destined to be huge. The Ryver rooms filled up. In the good feeling, Come-from-Beyond said that its mainnet would be ready to go within ninety days of the pre-sale's end: late February.

Before that statement, the second Nxt token backed by 1000 IoTAs per token appeared: KIOTA. The first tranche sold out, in two weeks, for 300 Nxt each. The next was listed at 375 and was bought out in two days. The final batch at 450 Nxt sold out just as quickly. Soon, there were several others, whose tokens were exchangeable for one IoTA each, which sold at even higher prices and were sold out. The OTC market was on a roll, which turned good feelings into better feelings. The first testnet beta version, iota-0.0.1.zip, was released on January 25th.Although its release prompted some hyper-bullish silliness, a sober voice kicked in: "IPOs typically double quickly and then trickle back to initial price, followed by a slow decline to some fraction of initial offering. Not everything can do an ETH." This statement was reflective of the bear-market pessimism that was only beginning to lift. No-one really knew what was coming.

Come-from-Beyond kept toiling away like the workaholic he is. By February 4th, he was up to version 0.3.0 and iotatoken was promising a "beautiful" user interface provided by a professional team of designers. Come-from-Beyond then proposed an improvement in the lower-level design that, he said, would shift the inner accounting from inputs/outputs to account balances. Doing so would make the underlying program more lightweight, but it would push back the mainnet launch somewhat. (After extensive testing, he later dropped it.) The first responses he got were somewhat cheerleadery assents, but he then got some pushback. At least one person objected on technical grounds, worrying that the change would make consensus harder to achieve, but more than one got ticked off because they were expecting IoTA to go into mainnet and be listed on at least one exchange. Part of the problem was that the impatient folks weren't very technically gifted.

They were also in a small minority, making up no more than a small gaggle of loud pipsqueaks. But, one of them – the loudest – was also a reliable volunteer. The next day, Come-from-Beyond had to step in and censor two posts with abusive content. A salty old hand who weny by the nick AltcoinUK started up an unmoderated IoTA thread; it quickly devolved into a series of arguments, accusations and rebuttals from the IoTA duo. But ironically, the tempest also called forth some feedback from people with deep technical knowledge – which was exactly what Come-from-Beyond was looking for. Despite no shortage of volunteers, the ones with the deep knowledge had been scarce – leaving Come-from-Beyond worried that he was shouldering too much of the technical work alone.

Now to the real reason I am replying: please do not pollute the threads with speculation, make a separate thread about it. IOTA is an IoT tech project, not a pump and dump investor scheme. How much is the software going to be worth on launch? No one knows yet. How much will it be worth 1-2-3 months post-launch? NO ONE knows, and if they claim they do they are lying. This vacuous speculation only derails the real purpose of IOTA: real life IoT applications. This is the *only* thing that should be in focus here. If you only want to buy IOTA because CfB coded my vision with Mtchl's formulas and math prowess and you got no other vision for IOTA yourself, then I don't even see why you even want to buy it? You clearly have no idea what it even is and only look for a quick buck, sorry but we have explicitly stated repeatedly that we do not care about such leechers.

Shortly afterwards, a friendly mainstay of the community created a speculation thread - which turned into an OTC buy-and-sell thread. It was here that the new altcoin bull market, as reflected by the jump of an earlier pre-sale called Augur rising to 3-4 times its pre-sale price as of mid-February, gave the IoTA price its second oomph. As winter turned into spring, IoTA climbed up to more than twenty-five times its pre-sale price – and these prices prevailed for some two-digit-BTC buys.

While the OTC price kept climbing, the launch of IoTA's mainnet kept getting pushed back – and that rise in price got a rise of something else out of iotatoken. On February 27th, someone asked "when release?"; Come-from-Beyond answered, "If you need Iota for M2M [machine-to-machine] then it can be usable right away (in test mode though)." That same day iotatoken revealed that he had to fire the GUI designer he had earlier hired for non-performance, as part of an answer that both complained about AltcoinUK's carping and implied he and Come-from-Beyond were supplying a GUI wallet as a courtesy to the pre-sale buyers. The next day, in answer to another questioner who politely asked for an updated timetable but firmly said there were delays, he amplified Come-from-Beyond's above "test mode" response :

Listen, what you are a part of is a self-fulfilling prophecy. We are saying that there is no delay on IOTA, because there isn't. IOTA exist, you can try it out yourself, but IOTA is back-end IoT technology, not a glossy front-end GUI. The GUI has been delayed, yes, but this does not impact IOTA the technology you purchased. It's really important that people understand this. We're not going into early stage beta, we're going into a very tested and optimized beta, so no real time has been lost.

But if you guys keep going on and on and on about it, yes it will look like IOTA got issues to the uninformed, which is obviously not good, but more importantly: not true.

The same day, he introduced an official IoTA forum and said that he would deprecate his participation in the thread in favour of the forum; he didn't. The toil continued, as did a pattern of defensiveness. But that was laid aside for the next big announcement: a partnership with Microsoft Azure's Blockchain As A Service project. At that time it was not widely known that Microsoft was eager to get lots of cryptocurrencies on Azure, so its admission criteria were fairly relaxed. So naturally, the OTC market went gaga over the news. Around then, Come-from-Beyond agreed to act as escrow for over-the-counter trades and to change the entries in the genesis block to include the new address generated for the buyer. The Azure news got some community members digging up address of a few cloud-hosting heavyweights to contact about IoTA and brought back the old excitement.

Emotional Blowup

As some of you may have guessed, the release date kept getting pushed back. That second user-interface designer, bruited as a bigwig in his field, proved to be just like the first one: he reneged. So did a third. The team had to resort to asking a fourth, a fellow who's well trusted in the Nxt community but also's been under previous time pressures. As I write this, IoTA still does not have a GUI: you can read iotatoken's explanation here.

Interestingly, those delays did not affect the price on the OTC market, which kept going up and up until March. After achieving a price greater than 3000 satoshis on the various Nxt Assets, the direct-to-BTC price settled down to about 2,500 satoshis. Only in the last month or so has it started to sag a bit.

The mainnet has not been released as yet. Come-from-Beyond is working as hard as ever, and the testnet versions are regularly upgraded with new features added. For example: it got a more secure address generator, multisignature capability and was remade to more easily act as an oracle for smart contracts. IoTA did go to 0.7.0, 0.9.0, 0.9.x: as of the time of this writing, the latest version is 0.9.22. But, the 1.x signifying release is still out of reach. From time to time, Come-from-Beyond says that progress will be speeded up if he has more (technically astute) testers.

A pre-sale that jumps up many times always attracts a certain type of character. Early in March, a feller with a bad case of the regrets jumped in demanding a second pre-sale. He was rebuffed, but after he went on his way iotatoken's mission-statement commentary changed subtly:

We chose to do zero premine in order to ensure that the community has to take care of itself and not be dependent on us. We could've easily set aside 5% premine and used these funds to sustain IOTA, but this would make us liable, which we're not. Instead IOTA lives or dies by the community, as such an open source decentralized technology should. If you hold IOTA and you want IOTA to succeed, you must accept that you should probably donate some of your iotas towards whoever you see got an interesting project going on, setup some bounties, do some marketing, whatever.

I joined Nxt in 2013 and lead the first organized effort to get Nxt on the right track, this was December 2013. I, together with 2 others got over 70 volunteers to sign-up and we laid out the plans for how we could leverage Nxt's unique position as a superior technology with a great time window on other projects like Bitshares and Ethereum. What happened? The Nxt whales refused to put up bounties. Some even promised bounties, but then didn't pay when work was delivered. This created a completely toxic environment and frankly disincentivized a lot of people from helping Nxt. Why would you want to work for free to make someone else rich, someone that doesn't even care to compensate you for the work you do? This was the biggest problem in Nxt….In IOTA, as the architect and manager I am already the 'de facto' name and face of IOTA publicly and I presume that will continue to be the case as long as I lead the project and negotiations. I don't mind this, my intention was always to be public. IOTA is a project for the real world, not some esoteric 'movement' in the shadows. BUT like I have stated numerous times: it's important that IOTA does not depend on just one or a handful of guys. This is why CfB describes himself as a "simple coder", he does not want this hero status because it will lead people to draw irrational conclusions based on his activity within IOTA. You cannot have one or a couple of people be larger than the project itself, once that happens it is way too vulnerable, which makes companies weary of adopting it….At the moment my name is all over the internet tied to IOTA due to several interviews and articles, which is good since I am in the middle of negotiating a lot of potential opportunities for IOTA, but I cannot be the sole representative, it leads to IOTA being way too reliant on me, which is very unhealthy. Another issue is the fact that travelling to tens of conferences per year cost A LOT and they usually overlap in time, and usually there is very little reason for there to be the same person at every event, the presentation itself is what matters the most, so having different representatives in different regions of the world is undoubtedly the most efficient in terms of time and cost. But don't worry, I have no plans of stepping down my involvement in ensuring IOTA's success, on the contrary, IOTA is important for our vision for our hardware start-up too.

Not worried about it. The sale of iota software was nowhere near similar to Nxt ICO. We know from history that the real number of actual Nxt whales was less than 50 and they all put in just a few dollars. This was *pure* speculation. IOTA already got a half a million dollars of real money put into it by hundreds of people, this creates a strong incentive to ensure that IOTA gets real adoption. Nxt whales basically bought a lottery ticket and thought that there was no limit to how much it would be worth, so they refused to put up any bounties out of pure greed. This was also a very different time, VC money wasn't going into crypto yet, big companies hadn't even heard of 'blockchain' yet, all the other coins were copypastes etc. etc. This time around the world is very receptive to this technology and the ecosystem has matured a lot. Are there still greedy speculators? Of course, but even those who simply bought for speculation know now from experience that sitting on the tokens without doing anything is the worst strategy possible to get profits. To tie this back to the Nxt situation: if the whales had even just put up 10% of their holdings they would've grown the Nxt ecosystem probably 100fold and ensured that their remaining 90% would have become SO MUCH MORE valuable than it ever became. So the Nxt whales essentially lost countless millions on their greed.

But I also believe it will be different this time because IOTA is a project with a clear market, clear roadmap and clear vision. Nxt was not. Nxt just had some peripheral ideological basis of decentralization and a ton of features that were just created without anyone ever asking: "Who is going to use this?" In IOTA we only care about the real life solutions.

In those sweet days of March, these statements were welcomed and taken as evidence of good stewardship. But if you read them carefully, you'll see that he was not only asking community members to volunteer their time but also some of their bought IoTA on the grounds that Nxt went into a tailspin because of "greed." As the zero-premine statement indicated, he and Come-from-Beyond had reserved no IoTA for themselves (other than what they bought with their own funds.) So when spring came along and he saw a need for a Foundation, bounties, etc., he called on the community to donate. All for the sake of IoTA becoming a community coin instead of a coin dependent on the devs. It seemed that those 930.96250857 collected from the presale would not be enough. (Some of it, iotatoken later disclosed, was used to pay Norwegian VAT.)

In mid-March, pledges to the future IoTA foundation started trickling in: theese were big pledges from big holders. Around the same time, there was a call for contributions to a secret "Big Deal" that iotatoken was careful enough to describe as a "Potential opportunity" when he first announced it. The rumour mill coalesced around this fill-in: some cryptocurrency heavyweight or big company wanted to buy a whale's stake of IoTA – 25 million, or about 2.5% of the whole supply - at well below the then-prevailing OTC price but well above the pre-sale price. Pledges then tended to be dual: some for the Foundation, some for the "Big Deal." But there was some pushback, in part because of the secretive nature of the "Deal."

All of those prefatory, adumbratory, foreshadowy moments came to a head when a character by the name of troleroo accused iotatoken of engaging in "emotional blackmail" (in my opinion, on iffy grounds.) When he saw it, iotatoken got his dander up:

Emotional blackmail, are you serious? I am simply stating the truth. What do you think cause adoption and appreciation of value of a software/token? It's hard work and strategic decisions. Look at Nxt, it was groundbreaking in numerous ways, yet achieved 0 real life adoption due HODL 4 LIFE mentality permeating the entire community from late 2013 to late 2015

My comment about not wanting to hear any complaints come from experience, people tend to complain when they realize they have lost an opportunity, which I don't want to hear. Again: you are 100% free to make your decision, but you can't just sit there expecting to hodl your tokens and magically people will want to buy them for some dreamed up value without some BIG things happening. I present the community with big opportunities, if it doesn't take it (fortunately so far the overwhelming majority do take it) it can't complain either.

A moment was reached. Subsequent to that confrontation, iotatoken recurrently claimed that someone had accused him of being a blackmailer. By May, It became part of his standard routine when he faced more pushback. The pledges still rolled in, but a line had been crossed. The day after, in a response to an informational question, he announced that the goal for funding the Foundation was 50 million IoTAs or 5% of the supply: "I am the founder of the foundation. At the moment we're still quite a while from establishing the foundation at reached 50 million. Though we got quite some time left before launch, so I'm confident we can reach the goal."

Again, in the happy 25-bagger days of early spring, this goal was taken in stride. The pledges for both the Foundation and the Big Deal kept rolling in. In mid-April, Come-from-Beyond adjusted the supply to make it 2,779,531 times larger. The new supply was 2,779,530,283,277,761 iotas. The reason given was, 2,779,530,283,277,761 made for a nice elegant number in ternary base-3: 111,111,111,111,111,111,111,111,111,111,111. What this new supply meant for a future exchange listing was easily answered: any exchange need only trade it in megaiotas (1 million), gigaiotas (1 billion) to get a reasonable Bitcoin price per unit. This too was greeted with approval.

The community spirit did largely hold up, but iotatoken had hardened his position. In response to complaints, he fell into the habit of saying it was up to the community to make IoTA into a winner. Initially, he stood by this on the ground that both he and Come-from-Beyond were working day and night on the project. One of his suggestions was community members should get the word out about IoTA in the hope that it would attract one or more startups into using it. These suggestions pointed to the fact that there were no shortage of volunteers per se, but there was a real dearth of volunteers with professional programming skills and experience. Amateur techies are the folks who are testing the various versions right now. In this sense, "the community" did step forward.

But the occasional complaints about the delays kept coming in as IoTA was left behind by bigger projects. On May 4th, when Liskers were excitedly waiting for the launch and >WAVES' pre-sale got rolling, a complaint asking for "better communication" got a lengthy response which included this snippet: "So repeat after me: you bought IoT software, therefore I assume you need it for some IoT project, or at least a distributed ledger project. I assume this of every IOTA holder, and when it's clear a holder does not have any intention of using IOTA for anything other than piggybacking on other people's blood, sweat and tears for quick profit, well then I tell them to fuck off, because we were 100% open and crystal clear on this from day 1….I want to say that OF COURSE I understand that a significant portion of IOTA holders got no tech skills, no tech plans for IOTA and may not even care about IOTA beyond pure profit. I'm a realist and a pragmatic person, but I don't OWE you anything, so when people start using terms like 'blackmail' when we ask people to do (testing) what has always been obvious would be needed, I will respond with "Fuck off". If you JUST want to profit from IOTA, fine, it's a choice you've made, I can't and won't stop you, but you could AT LEAST do the sane (even from a purely egoist speculator POV) thing and not just sit around complaining, but at least contribute something to the COMMUNITY."

This…forthrightness got a few folks wondering if IoTA would be better off with a community manager with thicker skin, which of course iotatoken blew off. Inevitably, this hardened attitude – along with the insistence that "there has been no significant delays" crept into the pledges for the IoTA Foundation. Before he got into that, iotatoken did leaven his posts with apparent softeners like: "As the leader of the project I accept wholeheartedly that any frustration will be directed at me, that is inevitable and fair." But the overall tone of his hard-arsed missives increasingly made those mollifiers look like boilerplate.

He did show a pattern of following in someone's wake when it came to escalating his demandingness. On May 20th, a community member named bubbletea called for a vote on whether or not 5% of all IoTAs should be allocated to the foundation automatically. This suggestion, iotatoken demurred from because he interpreted it as a contract-breaking premine. But the suggestion plus his demurrage did reinforce his "you bought software, not an investment" stand. He also took bubbletea's proposal as leverage to harden up once again:

This is also why I am 100% entitled, in fact obligated by logic, to tell anyone who thinks for a moment that we're working for them for free, or that we owe them anything other than the software they bought, to 'fuck off', because we did not allocate a single iota for ourselves, so as to avoid that exact scenario. I won't mention names right now, but one such example is one guy in this very thread complaining, while he is advertising and selling iotas at a 20x ROI from our work, without having done anything himself.

When May turned into June, he stated that he would not be putting the same effort into IoTA that he used to put in unless the Foundation was adequately funded. By this time, it had been more than five months since the crowdsale's end. The testnet versions kept being churned out, but there was still no estimated time for the livenet. This new escalation got some pushback, again, but it also was received with a lot of support from the community members who had stuck with IoTA.

We can look at the development of IoTA as a real-time experiment on what it takes to build an innovative "community" coin. So far, the results are:

If you offer a compelling vision, come up with an altcoin that either produces huge quick profits, and show that you're working hard yourself, you can be quite demanding of the community members and most will rally around you.

As long as you have that "hook" in #1, the bulk of the community members will accept delays, pushbacks and will not hold you to your prior words.

So long as you try, and push yourself & other hard, almost no-one will ask if you've bitten off more than you can chew.

With few exceptions, the folks that are not satisfied will not raise a ruckus: they'll just quietly move on.

The bystander effect is real. As Conservatives, we all know this: the "edge case" of the bystander effect is found in socialism. It can be reduced by project (or commune) leaders who work like Stakhanovites but it's still there.

It can also be reduced somewhat by getting demanding, but doing so is perilous unless you yourself set a good example. This example-setting includes both hard work and showing some intermediate results that the community can get excited about.

This experiment of a sort is still in progress; it's still testing iotatoken's hypothesis that Nxt is fading away because of speculators' and whales' greed. If he's right, then IoTA will succeed. But if not, the new sphere of innovative altcoins will again learn some old-school lessons.